Boxing Day spending has seen the hospitality sector soar even as retailers experienced a slightly weaker day on the tills compared with last year.
That's according to figures from payments processor Worldline NZ, which showed spending at food and liquor services outlets, including cafes, takeaways and bars, was up 14.1% on last year, to $14.6 million.
However, consumer spending processed through all core retail merchants reached $98.3m, down 0.6% from last year.
Not as many leftovers this year
Infometrics economist Brad Olsen told BusinessDesk that instead of buying goods, New Zealanders were eating up a storm on Boxing Day.
“It’s a bit of a different trend, as normally you'd think Boxing Day to be for shopping rather than eating. And maybe people didn’t have as many leftovers this year.”
It was a tougher Christmas for retailers this year, but it wasn’t unexpected.
“It’s only 0.6% down and in a sense, it’s still not awful, given how quickly interest rates have risen."
The weakness in spending was a sign households were being more cautious with their money.
Limited pot of money
That meant, Olsen said, retailers would have to work "very hard" to convince households to open their wallets.
The regional breakdown for Boxing Day showed spending was trending up in tourism centres but down in cities.
Wellington, the city that will fear the worst from the new government's clampdown on the public sector, had the biggest drop in NZ, down $7.4m for a decrease of 10.8%, while Wairarapa was up 8.5%.
“The real difference is the dichotomy between the Wairarapa, up strongly, and Wellington, down very sharply. I think that highlights the Wairarapa as a real favourite tourism spot," said Olsen.
Worldline NZ said the most transactions on Boxing Day happened at 12.34pm when 6,074 payments were processed through its network, but this was still 44% lower than the peak minute last Friday in the lead-up to Christmas.
Foot traffic up
Heart of the City chief executive Viv Beck said there was a good vibe in Auckland’s city centre on Boxing Day.
Foot traffic on Queen Street was reportedly up about 20% on last year: “It's too early to say how that translates into overall sales, but this is great to see."
Worldline NZ 's figures showed Auckland and Northland processed the largest amount of transactions in NZ at $39.9m, down 0.6%.
A Kiwi Property spokesperson said three of its malls across the country experienced a 15% increase or more in foot traffic from last year.
“We had an extremely strong Boxing Day across our portfolio of mixed-use and retail centres, including a 15% increase in foot traffic at Sylvia Park and more than 20% at LynnMall and The Base, compared to the same time last year.”
Sylvia Park, based in Mt Wellington, Auckland, is the company's biggest mall in NZ, while LynnMall is in New Lynn, West Auckland, and The Base is in Hamilton.
Movements in market
Following the busy shopping period, listed retailers had a mixed first day of post-Christmas trading,
Jeweller Michael Hill International ended the day up 6.4% to $1 a share. Briscoe Group, meanwhile, was down 0.2% to $4.40 a share.
The Warehouse Group was up 0.6% to $1.60.
Hamilton Hindin Greene investment adviser Grant Williamson said those market movements on Wednesday didn't necessarily reflect a strong market.
It was an important time of the year for listed retailers, but the market was thinly traded as most of the big players were away, he said.
“So, I wouldn't put too much emphasis on the small movements and the retailers at this stage until they come out with their sales figures and margins further down the track.
“The market is probably a little bit blind to how things have gone.”
According to Worldline NZ, across the country, seven regions reported a decrease in spending on Boxing Day.
They were Wellington (-10.8%), Bay of Plenty (-6.4%), Taranaki (-3.8%), Hawke's Bay (-3.5%), Gisborne (-2.9%), South Canterbury (-1.6%) and Auckland/Northland (-0.6%).
The biggest gains were in Otago (up 9.4%), Wairarapa (up 8.5%) and Nelson (up 7.2%).
